Following questions were submitted by an organization regarding the Fiqh
of Waqf. A copy of answer is reproduced here with (Edited) questions...

Overview:: Basically ask for donations from muslims and once we have a set
amount in our hands we would like to invest in halal businesses and use the
profit for the purpose. Keeping this in mind please try to answer the questions
below to the best of your knowledge, INSHALLAH.

1) What is a WAQF? All essential principles, Sunnah and history of waqf,
2) What is Bait ul Maal?
3) Can we ask for donations from muslims and put the funds in WAQF? as
technically the donations are sadaqa and not WAQF.
4) Can we invest the money? and make profit on it so that the money grows
5) If we buy a house for example, that will become waqf property, so can we sell
it back and make profit out of it??? I heard that waqf property cannot be sold.
6) Can Sadaqa money be used for investing and making profit.....the intention is
to have more money to help more people.
7) What type of investments are we limited to??
8) Does the properties be registered under the waqf's name??
9) Can donations be given away??
10) Can the investments be moved around...refer to question 5....we buy a house
then sell it then but some cars then sell it and keep doing that so as to make
profit.
11) The people working for waqf - do they get salaries/expenses? if yes then how
much?
12) Can we initially collect a specific amount of money and the start investing?
like say $ 1 million would be the target money in hand then invest that around
and make profit.
In the name of Allah, Most Gracious, Most Merciful

Assalaamu `alaykum
waRahmatullahi Wabarakatoh

We are pleased to read about your enthusiasm and desire to create a system so
that Muslims can obtain Shariah compliant loans and grants thus saving them from
the interest based loans. May Allah accept your intentions and make it easy for
this project to become a reality. Verily this Ummah is in need of such a
facility.

Hereunder are the answers to your queries.

1. The literal meaning of waqf is to stop and in Shariah it means to assign a
property in the ownership of Allah in which the benefits are spent on those whom
the waqf is assigned for.

Historically, the act of assigning something as waqf has been a practice since
the beginning of Islam. In fact, similar acts of waqf can be found in the
previous nations as well. The Bible mentions assigning waqf for the sake of
Allah. In the Qur’an it is stated that Mariam’s (Alaiha al-Salam) mother took a
vow to make her child for the service and worship of Bait al-Maqdis, this is a
form of waqf. If children were made waqf for the houses of Allah, then it is a
reason to believe that other items were also made waqf. Islam broadened the
concept of waqf.

Many examples of waqf can be found in the early periods of Islam. Uthman (Radhiyallahu
Anhu) made waqf of the well of Roma. Imam Bukhari in his Sahih narrates the
incident of the waqf made by Umer (Radhiyallahu Anhu):

Umer (Radhiyallahu Anhu) made waqf of the land which
he acquired from the battle of Khaibar and stipulated conditions that it cannot
be sold, gifted, or inherited. The income derived from it will be spent on
travelers, guests, solders, the poor and needy, and the family members of Umer (Radhiyallahu
Anhu). Hafsa (Radhiyallahu Anha) will be the first trustee thereafter Ibn Umer (Radhiyallahu
Anhu). After the demise of these two, the eldest from the family of Umer will
become the trustee. The trustee will be able to eat from it an ordinary amount,
but will not be able to hoard and stock it. (Jadeed
Fiqhi Masa’il 2:269)

The wisdom behind waqf is development and empowerment of people.

Islam has supported such organizations and investments schemes to a great
extend. Imam Muslim narrates:

Abu Hurairah (Radhiyallahu Anhu) narrates that Rasulullah (صلى الله عليه وسلم)
said, “When a person passes away, his actions from him are terminated, except in
three cases. He gave something in charity which is continuing, or knowledge
which is benefited from, or son who makes dua for him.

The method to make a property waqf is to make intention of it and declare it to
be waqf. Waqf property cannot be sold, inherited, nor can the waqf be cancelled.
It is permissible to give liquid assets as waqf. The assets should not be given
out to the people, but instead it should be invested and the profits spend on
the group of people it was made waqf for.

3. Donations may be asked from people to be put in the fund of Waqf. However it
should be made clear and have them agreed that the money will be for waqf
purposes which is to cater for Muslims student seeking loans and grants. This is
necessary since not all donations are considered waqf.

4. It is permissible to invest the money and make a profit from it and give the
profit to the people who the waqf was made out for. (Refer to Anwer 1).

5. Once a property is made waqf, it cannot be sold or inherited. However, if the
person making the waqf made a condition that it maybe sold and replaced by
another property, then it will be permissible to sell the property so another in
place is purchased. If the original person did not make such a condition, but a
greater benefit is achieve by selling the property and investing else where,
then too it will be permissible. Jurists have stated three conditions for it.
Firstly, that it must not be sold for below normal price. Secondly, the right to
sell will be given to trustworthy and righteous trustees, and not just any
trustee. Thirdly, in place of the property another property is purchased and not
sold for cash.

Waqf Imlaak kay Shar’ee Ahkam p.135 Idarah al-Qur’an

If the house was not made waqf, but it was bought with the waqf money as an
investment, then it will be permissible to sell the house, since the investment
is the purchasing and selling of houses.

6. For anything to become waqf, it must be stated clearly e.g. I make this waqf
for such a group or I give this in sadaqah infinitely for such people. Not all
sadaqah are considered waqf.Imdad al-Fatawa (2:605) Maktaba Darul Uloom Karachi

7. All types of investments are allowed which are Shariah compliant. However,
the capital amount should always remain. It is one of the conditions of waqf is
that the original assets remain and the benefits are spent upon the people.

8. It is not necessary to register the item/wealth under the waqf’s name.
However, if there is fear that the inheritors might make a claim for its
possession, it will be necessary to get it registered.

9. Refer to Answer 6. Donations must be spent in the cause it was donated for.

10. Refer to Answer 5.

11. If the people making the waqf make a condition that the trustee and workers
can receive a normal salary, then it will be permissible to receive a salary.

12. Money may be collected so it may be invested later. When collecting, it
should be made clear that it is for waqf for assisting this particular group of
people.